NVIDIA Reports Financial Results for Annual and Fourth Quarter Fiscal 2012

Revenue for the year increased 12.8 percent over fiscal 2011 to $4.00 billion.
GAAP gross margin for the year was 51.4 percent, up 11.6 percentage points; non-GAAP gross margin was 51.9 percent, up 6.8 percentage points.
GAAP EPS for the year rose 118.6 percent; non-GAAP EPS rose 46.9 percent.
Quarterly revenue decreased 10.6 percent to $953.2 million from $1.07 billion in the previous quarter.
GAAP gross margin was 51.4 percent for the quarter; non-GAAP gross margin was 52.5 percent.
Quarterly GAAP EPS were $0.19, down from $0.29 in the previous quarter; non-GAAP EPS were $0.26, down from $0.35 in the previous quarter.
NVIDIA (NASDAQ: NVDA) today reported revenue for fiscal 2012 ended Jan. 29, 2012 of $4.00 billion, up 12.8 percent from $3.54 billion in fiscal 2011. GAAP earnings per share for the year were $0.94 per diluted share, an increase of 118.6 percent over $0.43 in fiscal 2011. Non-GAAP earnings per share for fiscal 2012 were $1.19, up 46.9 percent over $0.81 in fiscal 2011.

Revenue for the fourth quarter of fiscal 2012 was $953.2 million, down 10.6 percent from the prior quarter, and up 7.5 percent from $886.4 million in the same period a year earlier.

"I am pleased with our achievements last year. Our GPU business grew sharply. And, with the success of Tegra, we established our position in the mobile market," said Jen-Hsun Huang, president and chief executive officer of NVIDIA. "We expect continued growth ahead, as Tegra 3 powers a new wave of quad-core super phones and Kepler, our next-generation GPU architecture, sets new standards in visual and parallel computing."

----------------------------------------------------------------------------
                                             Annual Highlights
----------------------------------------------------------------------------
   (in millions except per       FY12        FY11        FY12        FY11
         share data)             GAAP        GAAP      NON-GAAP    NON-GAAP
----------------------------------------------------------------------------
Revenue                         $3,997.9    $3,543.3    $3,997.9    $3,543.3
----------------------------------------------------------------------------
Gross margin                       51.4%       39.8%       51.9%       45.1%
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Operating expenses              $1,408.2    $1,153.3    $1,245.7    $1,096.4
----------------------------------------------------------------------------
Net income                        $581.1      $253.1      $734.4      $476.4
----------------------------------------------------------------------------
Earnings per share                 $0.94       $0.43       $1.19       $0.81
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----------------------------------------------------------------------------
                                           Quarterly Highlights
----------------------------------------------------------------------------
   (in millions except per      Q4 FY12     Q3 FY12     Q4 FY12     Q3 FY12
         share data)             GAAP        GAAP      NON-GAAP    NON-GAAP
----------------------------------------------------------------------------
Revenue                           $953.2    $1,066.2      $953.2    $1,066.2
----------------------------------------------------------------------------
Gross margin                       51.4%       52.2%       52.5%       52.5%
----------------------------------------------------------------------------
Operating expenses                $367.7      $359.6      $325.2      $317.6
----------------------------------------------------------------------------
Net income                        $116.0      $178.3      $158.1      $217.0
----------------------------------------------------------------------------
Earnings per share                 $0.19       $0.29       $0.26       $0.35
----------------------------------------------------------------------------

On a GAAP basis, the company recorded net income of $116.0 million, or $0.19 per diluted share, for the fourth quarter of fiscal 2012. That compares with net income of $178.3 million, or $0.29 per diluted share, in the prior quarter and $171.7 million, or $0.29 per diluted share, in the same period a year earlier.

On a non-GAAP basis -- which excludes certain charges or credits, as applicable in the fiscal quarter, and the tax impact associated with such items, including: stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, and legal settlements -- net income was $158.1 million, or $0.26 per diluted share. That compares with non-GAAP net income of $217.0 million, or $0.35 per diluted share, in the prior quarter, and net income of $142.4 million, $0.24 per share, in the same period a year earlier.

GAAP gross margin was 51.4 percent, compared with 52.2 percent in the previous quarter and 48.1 percent in the same period a year earlier. Non-GAAP gross margin, which excludes stock-based compensation and a legal settlement charge, was 52.5 percent and compares with 52.5 percent in the previous quarter and 48.3 percent in the same period a year earlier.

Outlook

Our outlook for the first quarter of fiscal 2013, is as follows:

Revenue is expected to be between $900 million and $930 million.
GAAP gross margins are expected to be 49.2 percent, plus or minus 1 percentage point; non-GAAP gross margins are expected to be 49.5 percent, plus or minus 1 percentage point.
GAAP operating expenses are expected to be approximately $383 million; non-GAAP operating expenses are expected to be approximately $340 million.
GAAP and non-GAAP tax rates are expected to be approximately 20 percent for the fiscal year 2013; and approximately 16 percent for the year, if the research tax credit is reinstated into U.S. tax law. Our annual projected tax rates reflect our expectation for the quarter, excluding any discrete tax events that may occur, which, if realized, may increase or decrease our GAAP and non-GAAP tax rates.
We estimate depreciation and amortization for the first quarter to be approximately $52 million to $56 million. Capital expenditures are expected to be in the range of $35 to $45 million.

Diluted shares for the first quarter are expected to be approximately 622.5 million.

Fourth Quarter Fiscal 2012 Highlights:

NVIDIA's Tegra 3(R) processors started shipping to consumers in the Asus Transformer Prime tablet. The tablet is the first to run Android 4.0, "Ice Cream Sandwich." Asus also announced a $249 tablet to be based on Tegra 3.

Other Tegra 3 devices announced in the quarter include:

Asus Transformer Prime TF700T, similar to the Prime, but with a 1920x1200 resolution display.
Acer Iconia Tab A700, also with a 1920x1200 display.
Lenovo IdeaPad K2, again with a 1920x1200 display.
Fujitsu announced an unnamed Android phone, running Android 4.0 "Ice Cream Sandwich."

NVIDIA announced NVIDIA Mobilio(TM) technology, which increases productivity by enabling design and simulation to be accelerated on a single workstation.
CFO Commentary Commentary on the quarter by Karen Burns, NVIDIA interim chief financial officer, is available at www.nvidia.com/ir.

Conference Call and webcast Information NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter fiscal 2012 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial             (706) 679 2572      . A live webcast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations web site www.nvidia.com/ir and at www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its first quarter fiscal 2013.

Non-GAAP Measures To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income tax expense, non-GAAP net income, and non-GAAP net income, or earnings, per share. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude legal settlements, a charge related to the weak die/packaging material set that was used in certain versions of the NVIDIA's previous generation MCP and GPU products, net of insurance reimbursement, stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, and the associated tax impact of these items, where applicable. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA NVIDIA (NASDAQ: NVDA) awakened the world to computer graphics when it invented the GPU in 1999. Today, its processors power a broad range of products from smart phones to supercomputers. NVIDIA's mobile processors are used in cell phones, tablets and auto infotainment systems. PC gamers rely on GPUs to enjoy spectacularly immersive worlds. Professionals use them to create visual effects in movies and design everything from golf clubs to jumbo jets. And researchers utilize GPUs to advance the frontiers of science with high-performance computing. The company holds more than 2,200 patents worldwide, including ones covering ideas essential to modern computing. For more information, see www.nvidia.com.

Certain statements in this press release including, but not limited to statements as to: the company's financial outlook for the first quarter of fiscal 2013; the benefits of NVIDIA Mobilio technology; the company's continued growth; the success and momentum of Tegra 3; the impact of the company's next-generation Kepler architecture; and the effects of the company's patents on modern computing are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended October 30, 2011. Copies of reports filed with the SEC are posted on the company's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Copyright 2012 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, Mobilio, GeForce, Tegra and Tesla are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

                             NVIDIA CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   (In thousands, except per share data)
                                (Unaudited)
                            Three Months Ended        Twelve Months Ended
                         ------------------------  ------------------------
                         January 29,  January 30,  January 29,  January 30,
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
Revenue                  $   953,194  $   886,376  $ 3,997,930  $ 3,543,309
Cost of revenue              463,181      460,017    1,941,413    2,134,219
                         -----------  -----------  -----------  -----------
Gross profit                 490,013      426,359    2,056,517    1,409,090
Operating expenses
  Research and
   development               266,862      215,563    1,002,605      848,830
  Sales, general and
   administrative            100,834       88,018      405,613      361,513
  Legal settlement (A)             -      (57,000)           -      (57,000)
                         -----------  -----------  -----------  -----------
    Total operating
     expenses                367,696      246,581    1,408,218    1,153,343
                         -----------  -----------  -----------  -----------
Operating income             122,317      179,778      648,299      255,747
Interest and other
 income, net                   2,260        6,128       15,097       15,422
                         -----------  -----------  -----------  -----------
Income before income tax
 expense                     124,577      185,906      663,396      271,169
Income tax expense             8,552       14,255       82,306       18,023
                         -----------  -----------  -----------  -----------
Net income               $   116,025  $   171,651  $   581,090  $   253,146
                         ===========  ===========  ===========  ===========
Basic net income per
 share                   $      0.19  $      0.29  $      0.96  $      0.44
                         ===========  ===========  ===========  ===========
Diluted net income per
 share                   $      0.19  $      0.29  $      0.94  $      0.43
                         ===========  ===========  ===========  ===========
Shares used in basic per
 share computation           611,432      583,439      603,646      575,177
Shares used in diluted
 per share computation       618,599      601,559      616,371      588,684
(A) On January 10, 2011, the Company and Intel entered into a new six-year
    cross licensing agreement and both parties also agreed to settle all
    outstanding legal disputes. For accounting purposes, the fair valued
    benefit prescribed to the settlement portion was $57.0 million.


                             NVIDIA CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In thousands)
                                 (Unaudited)
                                                    January 29,  January 30,
                                                        2012         2011
                                                    -----------  -----------
ASSETS

Current assets:
  Cash, cash equivalents and marketable securities  $ 3,129,576  $ 2,490,563
  Accounts receivable, net                              336,143      348,770
  Inventories                                           340,297      345,525
  Prepaid expenses and other current assets              99,342       42,092
                                                    -----------  -----------
    Total current assets                              3,905,358    3,226,950
Property and equipment, net                             560,072      568,857
  Goodwill                                              641,030      369,844
  Intangible assets, net                                326,136      288,745
  Other assets                                          120,332       40,850
                                                    -----------  -----------
    Total assets                                    $ 5,552,928  $ 4,495,246
                                                    ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                  $   335,072  $   286,138
  Accrued liabilities and other current liabilities     594,886      656,544
                                                    -----------  -----------
    Total current liabilities                           929,958      942,682
Other long-term liabilities                             455,807      347,713
Capital lease obligations, long term                     21,439       23,389
Stockholders' equity                                  4,145,724    3,181,462
                                                    -----------  -----------
    Total liabilities and stockholders' equity      $ 5,552,928  $ 4,495,246
                                                    ===========  ===========


                             NVIDIA CORPORATION
            RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
                    (In thousands, except per share data)
                                 (Unaudited)
                             Three Months Ended         Twelve Months Ended
                      -------------------------------- ---------------------
                        January    October    January    January    January
                          29,        30,        30,        29,        30,
                         2012       2011       2011       2012       2011
                      ---------- ---------- ---------- ---------- ----------
GAAP gross profit     $  490,013 $  556,717 $  426,359 $2,056,517 $1,409,090
 GAAP gross margin         51.4%      52.2%      48.1%      51.4%      39.8%
  Stock-based
   compensation
   expense included
   in cost of revenue
   (A)                     3,048      3,049      1,726     11,322      8,308
  Legal settlement
   (D)                     7,300          -          -      7,300          -
  Net charge against
   cost of revenue
   arising from a
   weak die/packaging
   material set (B)            -          -          -          -    181,193
                      ---------- ---------- ---------- ---------- ----------
Non-GAAP gross profit $  500,361 $  559,766 $  428,085 $2,075,139 $1,598,591
                      ========== ========== ========== ========== ==========
 Non-GAAP gross
  margin                   52.5%      52.5%      48.3%      51.9%      45.1%
GAAP operating
 expenses             $  367,696 $  359,627 $  246,581 $1,408,218 $1,153,343
  Stock-based
   compensation
   expense included
   in operating
   expense (A)          (32,388)   (30,180)   (23,640)  (125,032)   (92,045)
  Amortization of
   acquisition-
   related intangible
   assets                (5,041)    (5,399)    (2,295)   (17,190)    (9,182)
  Net charge against
   operating expenses
   arising from a
   weak die/packaging
   material set (B)            -          -          -          -   (12,705)
  Other acquisition-
   related costs Copyright     (5,052)    (6,413)          -   (20,282)          -
  Legal settlement
   (D)                         -          -     57,000          -     57,000
                      ---------- ---------- ---------- ---------- ----------
Non-GAAP operating
 expenses             $  325,215 $  317,635 $  277,646 $1,245,714 $1,096,411
                      ========== ========== ========== ========== ==========
GAAP net income       $  116,025 $  178,273 $  171,651 $  581,090 $  253,146
  Total pre-tax
   impact of non-GAAP
   adjustments            52,829     45,041   (29,339)    181,126    246,433
  Income tax impact
   of non-GAAP
   adjustments          (10,718)    (6,302)        126   (27,810)   (23,165)
                      ---------- ---------- ---------- ---------- ----------
Non-GAAP net income   $  158,136 $  217,012 $  142,438 $  734,406 $  476,414
                      ========== ========== ========== ========== ==========
Diluted net income
 per share
  GAAP                $     0.19 $     0.29 $     0.29 $     0.94 $     0.43
                      ========== ========== ========== ========== ==========
  Non-GAAP            $     0.26 $     0.35 $     0.24 $     1.19 $     0.81
                      ========== ========== ========== ========== ==========
Shares used in
 diluted net income
 per share
 computation             618,599    613,560    601,559    616,371    588,684
Metrics:
Graphics Processing
 Unit (GPU) revenue                                    $2,542,430 $2,527,144
  Chipset product
   revenue                                              (197,417)  (687,033)
                                                       ---------- ----------
GPU revenue excluding
 chipset products                                      $2,345,013 $1,840,111
                                                       ========== ==========
GAAP Revenue                                           $3,997,930 $3,543,309
  Chipset product
   revenue                                              (197,417)  (687,033)
                                                       ---------- ----------
Revenue excluding
 chipset products                                      $3,800,513 $2,856,276
                                                       ========== ==========

(A) Excludes stock-
     based
     compensation as
     follows:                Three Months Ended         Twelve Months Ended
                      -------------------------------- ---------------------
                        January    October    January    January    January
                          29,        30,        30,        29,        30,
                         2012       2011       2011       2012       2011
                      ---------- ---------- ---------- ---------- ----------
    Cost of revenue   $    3,048 $    3,049 $    1,726 $   11,322 $    8,308
    Research and
     development      $   20,908 $   19,308 $   14,724 $   80,502 $   57,974
    Sales, general
     and
     administrative   $   11,480 $   10,872 $    8,916 $   44,530 $   34,071
(B) Excludes a charge related to the weak die/packaging material set, net of
     insurance reimbursement.
Copyright Other acquisition-related costs are comprised of transaction costs,
     compensation charges and restructuring costs related to the acquisition
     of Icera, Inc. that was completed on June 10, 2011.
(D) Excludes legal settlement charges and benefits as follows:
    On February 7, 2012, the Company and Rambus entered into a licensing
     agreement and both parties also agreed to settle all outstanding legal
     disputes. For accounting purposes, an additional charge of $7.3 million
     associated with the fair value prescribed to the settlement portion was
     recognized for the year ended January 29, 2012.
    On January 10, 2011, the Company and Intel entered into a new six-year
     cross licensing agreement and both parties also agreed to settle all
     outstanding legal disputes. For accounting purposes, the fair valued
     benefit prescribed to the settlement portion was $57.0 million.


                             NVIDIA CORPORATION
                 RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
                                                          Q1 FY2013 Outlook
                                                          -----------------
GAAP gross margin                                                      49.2%
    Impact of stock-based compensation (A)                              0.3%
                                                          -----------------
Non-GAAP gross margin                                                  49.5%
                                                          =================
                                                          Q1 FY2013 Outlook
                                                          -----------------
                                                            (In millions)
GAAP operating expenses                                   $           383.0
    Stock-based compensation expense included in
     operating expense                                                (34.0)
    Amortization of acquisition-related intangible assets              (4.2)
    Other acquisition-related costs (B)                                (4.8)
                                                          -----------------
Non-GAAP operating expenses                               $           340.0
                                                          =================
(A) Represents $2.8 million of stock-based compensation expense included in
    cost of revenue.
(B) Other acquisition related costs are comprised of transaction costs,
    compensation charges and restructuring costs related to the acquisition
    of Icera, Inc. that was completed on June 10, 2011.